Tech-heavy South Korean stocks declined 0.6%, Taiwan stocks slid 1.2%, the CSI300 index dropped 0.6%, while Hang Seng Index was down 0.7%
Asian equities dropped on Wednesday after disappointing earnings from Europe’s largest tech company ASML dragged chip stocks around the world.
Also weighing on the market was lacklustre earnings from French luxury giant LVMH that showed demand in China for luxury goods weakened, denting some of the enthusiasm around China spurred by stimulus measures.
Tech-heavy South Korean stocks declined 0.6%, while chip stocks led Japan’s Nikkei 1.8% lower. Taiwan stocks slid 1.2%. That left MSCI’s broadest index of Asia-Pacific shares outside Japan 0.32% lower.
Matt Simpson, senior market analyst at City Index, said investors are likely questioning how exposed to risk they really want to be, given there are risk events and a U.S. election on November 5.
I expect investors to become increasingly twitchy as we head towards November 5th, and keen that book profits at frothy levels, he said.
ASML, whose customers include AI chipmaker TSMC, logic chip makers Intel and Samsung, as well as memory chip specialists Micron and SK Hynix, forecast lower than expected 2025 sales.
The Dutch chip equipment maker said despite a boom in AI-related chips, other parts of the semiconductor market are weaker for longer than expected, leading to customer cautiousness.
The AMSL numbers were not good and suggest that all is not well in semiconductor chips outside of AI, according to Nick Ferres, CIO at Vantage Point Asset Management in Singapore.
A Bloomberg News report that U.S. officials have been considering implementing a cap on export licenses for AI chips to specific countries also weighed on sentiment.
The gloomy mood meant Chinese stocks declined in early trading as investors awaited concrete details on stimulus plans. The blue-chip CSI300 index dropped 0.6%, while Hong Kong’s Hang Seng Index was down 0.7% in early trading.
Investor focus is now on Thursday when China will hold a press conference to discuss promoting the “steady and healthy” development of the property sector.
We believe investors should view the policy announcements since September 24 as an integrated plan rather than isolated messages – the policy pivot looks very much here to stay, HSBC strategist Steven Sun said in a report.
